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Ayadi invests EGP 750m to develop 307 feddans in Qantara: managing director - Daily News Egypt

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Ayadi invests EGP 750m to develop 307 feddans in Qantara: managing director

Signing final contract with General Authority for the Suez Canal Economic Zone in April; completion of constructions in 2018

The managing director of Ayadi for Industrial Development, Moataz Baha El-Din, told Daily News Egypt in an interview about the future plans of the company and its new projects during 2017.  Investing EGP 750m to develop 307 feddans in El-Qantara is one of the most important projects this year.

What is the size of investments of equipping the area of El-Qantara West with utilities and when will the final signature take place?

Ayadi for Industrial Development expects the final contract to be signed with the General Authority for the Suez Canal Economic Zone in April to develop two areas in El-Qantara West, as well as equipping them with utilities. The areas amount to 307 feddans and investments will reach EGP 750m.

The operations in both areas include development and the provision of utilities. The first area amounts to 197 feddans and is dedicated to small- and medium-sized industries in the sectors of food and building materials, while the second area is on an area of 110 feddans and is dedicated to be a logistical area.

When was the first memorandum of understanding with the General Authority for the Suez Canal Economic Zone signed?

The memorandum of understanding was signed in October. The company presented three plans for development and providing facilities, and the General Authority for the Suez Canal Economic Zone is studying them now.

Chairperson of the General Authority for the Suez Canal Economic Zone Ahmed Darwish signed earlier a memorandum of understanding with Ayadi for Development and Investment, with Ayadi for Industrial Development being an industrial developer to conduct technical, economic, and social studies for the general plan of the area in Abu Khalifa in El-Qantara West. This is part of developing the economic zone in El-Qantara West as well as making it ready for investment. According to the general plan of the economic zone, that area will be dedicated to establishing labour-intensive small- and medium-sized enterprises, as well as commercial and logistical services that help in creating more jobs.

How long will the constructions take and under what system will the lands and units be offered?

The period of developing and establishing the units will not be more than a year, especially since they will be steel constructions with steel frames. The lands and units will be offered through a usufruct system for a period of 49 years and will be for Egyptian investors only.

When was Ayadi for Industrial Development established and what is the size of its capital?

The company was established in May 2016 with a registered capital of EGP 5bn and an issued capital of EGP 500m. It is owned by Ayadi for Investment and Development and one of the companies of the National Investment Bank. The company’s chairperson is Osama Saleh, while Ashraf El-Ghazaly is the CEO of Ayadi for Investment and Development.

The financial and technical consultant of Ayadi for Industrial Development is NI Capital, the investment arm of the National Investment Bank. Ayadi for Industrial Development contributes to Damietta Furniture City company by 15%. The first phase of the company is decided to be completed in December 2018. The requirements for 1,530 workshops and 140 factories with investments of EGP 1.1bn will be announced in April, in addition to the services area that includes hotels, a fair ground, and business centres with investments of EGP 3.3bn.

What are the new projects the company is contributing to in Upper Egypt?

Ayadi for Industrial Development will begin to develop Tahta Furniture Complex in Sohag with investments of EGP 350m in May.

The area of the complex is 70 feddans and the Industrial and Mining Projects Authority, affiliated to Ministry of Industry and Trade, has carried out the mission of equipping the lands with utilities, and will complete that project in April.

Ayadi will receive the area to develop it and build the workshops, facilities for exhibitions, and service places, as is the case in Damietta Furniture City.

When will the constructions be completed and what is the number of targeted units?

The number of units targeted to be established in the complex is 1,600 units, and the constructions will take about 1.5-2 years. The company presented to the governor of Sohag an initial work programme for developing the industrial complex.

When will Ayadi for Industrial Development start the execution of the “Your job next to your home” initiative?

Ayadi for Industrial Development is intending to execute the first four industrial complexes in Upper Egypt within the “Your job next to your home” initiative with the aim of developing four villages in Fayoum and Aswan, on an area of one feddan for each village.

What is the available size of investments to develop four villages?

Ayadi for Investment and Development has dedicated EGP 60m to Ayadi for Industrial Development with the aim of developing four villages. The target in the first place was to develop five villages. However, the high cost of developing each feddan—EGP 12m initially, but may reach EGP 15m—has contributed to deciding to develop four villages only as a model for the project to apply it in all governorates later.

When will the project be completed?

The company completed the feasibility studies in early January and is targeting to build 1,000 industrial units in 1,000 poor villages, namely one feddan in each village, in the first phase of the project.

The construction will be on 70% of the area with two floors, and the constructions of the industrial complexes are decided to be completed in six months, once the prime minister approves some procedures that would execute the project.

What are the procedures needed from the prime minister?

Ayadi for Industrial Development wants to communicate with the prime minister through an official memo to set a legal framework for the project and to approve changing the use of the lands from agriculture to commercial use, and to limit their usage for industrial activities. The aim is not to put the company in an illegal position, as the law criminalises building on arable lands.

There will be cooperation with the Industrial Modernisation Center, Federation of Egyptian Industries, and the cabinet to present the villages suggested to be developed.

What is the economic and social aim of “Your job next to your home” initiative?

The project aims at employing 350-500 workers in each unit on a land plot. That contributes to stopping immigration from villages to cities, which is the foundation of development. It also aims to create jobs for women who are the breadwinners in their homes, instead of them facing the dangers of travelling long distances in an inhumane manner in poor transportation for work.

The company’s market studies concluded that 40% of the females in the villages of Fayoum have to go to work in 6th of October City in trucks.

Moreover, it aims at preventing illegal immigration abroad and increasing the youths’ loyalty to the country, in addition to increasing exports to EGP 100bn as a result of increasing production, which contributes to increasing the national income.

What are the industries that will be established in these complexes?

The company will not determine the kind of industries that will be established in these units. This will be left for the advantage each village has in a specific industry or activities. Also, the company is conducting market studies to determine the needs of the villages’ residents and the industries they work in.

He said also that there are villages in Mansoura that manufacture products for international brands like Polo and Lacoste, such as Tanamel village, and the foreign companies send delegations to follow up on the production quality, in addition to Fowa in Kafr El-Sheikh, which is specialised in producing and exporting carpets.

What system is adopted for offering the units and what are the sources of financing?

The units will be offered through a renting-by-metre system with no maximum area for the units. The company provides the needed financing to start the projects through the initiative of the Central Bank of Egypt to finance small- and medium-sized enterprises with an interest rate of 5%.

The company presented the project to the Tahya Misr Fund to participate in the financing, especially since the fund invests its money with zero interests or profits.

How can vocational people be qualified to manage the projects?

There will be cooperation with training centres to qualify them to be able to manage the projects and establish successful administrative and production units, under the umbrella of the formal economy, especially because one of the goals of the project is to turn the informal economy into a formal one.

The company presented the suggestion and the feasibility studies of the project to the government as a model, and does not stipulate executing it. It works on encouraging the companies, especially that it is a non-profit project, while no development and management company agrees to get involved in projects with a profit ratio of less than 20%.

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